14-002403MTR Mirta Agras vs. Agency For Health Care Administration Status: Closed DOAH Final Order on Thursday, October 30, 2014.

Summary: Petitioner did not prove, by clear and convincing evidence, that a lesser portion of the total recovery from a third party settlement agreement should be allocated as reimbursement than the amount calculated under the formula in section 409.910(11)(f).

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

MIRTA AGRAS,

Petitioner,

vs. Case No. 14 - 2403MTR

AGENCY FOR HEALTH CARE

ADMINISTRATION,

Respondent.

_______________________________/

FINAL ORDER

A hearing was conducted in this case pursuant to sections

120.569, 120.57(1), and 409.910(17 ) (b), Florida Statutes (2013), 1 /

before Cathy M. Sellers, an Administrative Law Judge of the

Division of Administrative Hearings, on August 14, 2014, by video

teleconference at sites in Miami and Tallahassee, Florida.

APPEARANCES

For Petitioner: Christopher Klemick, Esquire

1953 Southwest 27th Avenue

Miami, Florida 33145

For Respondent: Adam Stallard, Esquire

2073 Summit Lake Drive, Suite 300

Tallahassee, Flori da 32317

STATEMENT OF THE ISSUE

The issue in this proceeding is the amount payable to

Respondent in satisfaction of Respondent ' s Medicaid lien from a

settlement received by Petitioner f rom a third party, pursuant to

section 409.910(17), Florida Statute s.

PRELIMINARY STATEMENT

By correspondence dated January 31, 2013, Respondent,

through its collections contractor ACS Recovery Services ( " ACS " ),

notified Petitioner that she owed Respondent $35,952.47 in

satisfaction of Respondent ' s Medicaid lien for med ical benefits

paid to Petitioner, to be paid from the proceeds of a settlement

she received as compensation for injuries she suffered as a

result of being struck by a motor vehicle. On May 19, 2014,

Petitioner filed a Petition to Determine Amount Payable to Agency

for Health Care Administration in Satisfaction of Medicaid Lien

( " Petition " ).

The final hearing initially was scheduled for July 7, 2014,

but pursuant to the parties ' joint motion, was rescheduled. The

final hearing was held on August 14, 2014 . Petitioner testified

on her own behalf and Petitioner ' s Exhibit 1 was admitted into

evidence over objection. Respondent did not present the

testimony of any witnesses and did not proffer any exhibits for

admission into evidence.

The parties were give n ten days from the date of filing of

the transcript, until September 5, 2014, to file their proposed

final orders. Pursuant to Petitioner ' s unopposed motion for

extension of time, the parties were given until September 12,

2014, to file their proposed fi nal orders. Both parties timely

filed Proposed Final Orders, and both were duly considered in

preparation of this Final Order.

FINDINGS OF FACT

1. Petitioner is a 35 - year - old female who currently resides

in Homestead, Florida.

2. Respondent is the st ate agency authorized to administer

Florida ' s Medicaid program. § 409.902, Fla. Stat.

3. On or about February 15, 2012, Petitioner was struck by

a motor vehicle and severely injured while attempting to rescue

her young son, who had run into a busy stree t in front of her

home in Hollywood, Florida.

4. Petitioner suffered a fractured skull and broken leg.

She was hospitalized and received medical care for her injuries .

5. Subsequently, she was treated by an orthopedic physician

and a neurologist. She estimated that she last received care or

treatment from these physicians in August 2013.

6 . The Florida Medicaid program paid $35,952.47 in medical

assistance benefits on behalf of Petitioner .

7 . Petitioner filed a lawsuit against the owners of the

vehicle that struck her.

8 . On January 11, 2013, Petitioner and the owner s of the

vehicle that struck Petitioner ( " Releasees " ) entered into a

" Release and Hold Harmless Agreement " ( " Settlement " ) under which

the Releasees agreed to pay Petitioner $1 50,000 to settle any and

all claims Petitioner had against them . Attached to the

Settlement was a document titled " Addendum to Release Signed

1/11/13 " ( " Addendum " ), which allocated liability between

Petitioner and the Releasees and provided a commensurate

allocation of the Settlement proceeds for past and future medical

expense claims . The Addendum stated in pertinent part:

The parties agree that a fair assessment of

liability is 90% on the Releasor, Mirta B.

Agras, and 10% on the Releas ees .

Furthermo re, the parties agree that based

upon these injuries, and the serious nature

of the injuries suffered by the Releasor,

Mirta B. Agras, that $15,000.00 represents a

fair allocation of the settlement proceeds

for her claim for past and future medical

expense s.

9 . Petitioner testified that she primarily was at fault in

the accident. She acknowledged that the statement in the

Addendum that she was 90% at fault for the accident and the

Releasees were 10% at fault was an estimate that she formulated

entirely on her own, without obtaining a ny legal or other

informed opinion regarding the apportionment of respective fault.

10 . Petitioner is not a physician, registered nurse, or

licensed practical nurse . There was no evidence presented

establishing that she ha s any medical training or expertise.

Thus, there is no professional basis for Petiti oner's position

that 10% of the Settlement proceeds represents a fair , accurate ,

or reasonable allocation for her medical expenses. Rather, her

position appears to be bas ed on the i ntent to maximize the

Settlement proceeds that are allocated to non - medical expenses,

so that she is able to retain a larger portion of the Settlement

proceeds.

1 1 . Respondent did not participate in discussions regarding

the Settlement or Adden dum and was not a party to the Settlement .

1 2 . Petitioner acknowledged that she still receives medical

bills related to the injuries she suffered as a result of the

accident, and that she still owes money for ambulance

transportation and physician treat ment. She was unable to recall

or estimate the amount she owes.

13. No evidence was presented regarding the actual amount

of Petitioner's medical expenses incurred due to her injury.

14. Petitioner has not paid any of her own money for

medical treatmen t, and no entities other than Medicaid have paid

for her medical treatment.

1 5 . Since being injured, Petitioner continues to experience

medical problems, including pain, dizziness, memory loss,

difficulty in walking or standing for extended periods, inab ility

to ride in vehicles for extended periods, balance problems, and

difficulty watching television or staring at a computer screen

for extended periods.

1 6 . Petitioner claims that , nonetheless, she has not been

told that she would need additional medi cal care or treatment.

1 7 . On or about January 31, 2013, Respondent, through ACS,

asserted a Medicaid claim pursuant to section 409.910(17),

seeking reimbursement of the $35,952.47 in medical assistance

benefits it paid on behalf of Petitioner.

1 8 . Petitioner instead sought to reimburse Respondent

$15,000 , the amount that Petitioner and Releasees agreed in the

Addendum represented a fair allocation of the Settlement proceeds

for Petitioner ' s claim for past and future medical expenses.

1 9 . When Pe titioner and Respondent were unable to agree on

the amount Petitioner owed Respondent in satisfaction of its

Medicaid lien, Petitioner paid ACS the $35,952.47 alleged to be

owed Respondent and filed the Petition initiating this

proceeding.

CONCLUSIONS OF LAW

20 . DOAH has jurisdiction over the parties to, and subject

matter of, this proceeding pursuant to sections 120.569,

120.57(1), and 409.910(17)(b), Florida Statutes.

2 1 . As a condition for receipt of federal Medicaid funds,

states are required to se ek reimbursement for medical expenses

incurred on behalf of beneficiaries who later recover from third -

party tortfeasors. See Ark. Dep ' t of Health & Hum. Servs. v.

Ahlborn , 547 U.S. 268 (2006). States may satisfy this

requirement by enacting statute s tha t impose Medicaid liens to

recover the portion of settlements that represent medical

expenses. See id . at 275 - 76. Ahlborn holds that to the extent a

state statute purports to impose a Medicaid lien on settlement

proceeds that are distinct from medical ex penses, such as pain

and suffering, lost wages, and lost future earnings, the statute

runs afoul of federal Medicaid law.

2 2 . Consistent with federal law , section 409.910 authorizes

and requires the State of Florida to be reimbursed for Medicaid

funds p aid for medical expenses when the beneficiary subsequently

rec eives a settlement from a third - party. Smith v. Ag. for

Health Care Admin. , 24 So. 3d 590 (Fla. 5th DCA 2009). The

statute creates an automatic lien on any such settlement for the

medical assi stance provided by Medicaid. § 409.910(6)(c), Fla.

Stat.

2 3 . Section 409.910(11)(f) establishes a formula to

determine the amount of Medicaid medical assistance benefits the

State is to be reimbursed. This statute states:

Notwithstanding any provisi on in this section

to the contrary, in the event of an action in

tort against a third party in which the

recipient or his or her legal representative

is a party which results in a judgment,

award, or settlement from a third party, the

amount recovered shal l be distributed as

follows:

1. After attorney ' s fees and taxable costs

as defined by the Florida Rules of Civil

Procedure, one - half of the remaining recovery

shall be paid to the agency up to the total

amount of medical assistance provided by

Medicaid.

2. The remaining amount of the recovery

shall be paid to the recipient.

3. For purposes of calculating the agency ' s

recovery of medical assistance benefits paid,

the fee for services of an attorney retained

by the recipient or his or her legal

representative shall be calculated at 25

percent of the judgment, award, or

settlement.

4. Notwithstanding any provision of this

section to the contrary, the agency shall be

entitled to all medical coverage benefits up

to the total amount of medical assistance

provided by Medicaid. For purpos es of this

paragraph, " medical coverage " means any

benefits under health insurance, a health

maintenance organization, a preferred

provider arrangement, or a prepaid health

clinic, and the portion of benefits

designated for medical payments under

coverage for workers ' compensation, personal

injury protection, and casualty.

2 4 . Under this formula, the amount the State is to be

reimbursed is half the amount of the total settlement recovery,

after deducting taxable costs and 25% attorney fees, not to

exceed the amount actually paid by Medicaid on the beneficiary ' s

behalf. § 409.910(11)(f), Fla. Stat; Ag. for Health Care Admin.

v. Riley , 119 So. 3d 514, 515 (Fla. 2d DCA 2013).

2 5 . Applying the apportionment formula in 409.910(11)(f)1.

to the $150,000 S ettl ement at issue in this case yields

attorney ' s fee s of $37,500, with $112,500 of the recovery amount

remaining. One - half of the remaining recovery amount is $56,250,

which is greater than the $35,952.47 of Medicaid assistance that

Respondent provided for P etitioner. Accordingly , if the formula

in section 409.910(11)(f) applies to determine the reimbursement

due in this case , Respondent is entitled to $35,952.47, which is

the amount of Medicaid medical assistance it actually paid on

Petitioner ' s behalf .

2 6 . Section 409.910(17) makes clear that the formula in

section 409.910(11)(f) constitutes a default allocation of

settlement proceeds attributable to medical expenses. See Davis

v. Roberts , 130 So. 3d 264, 268 (Fla. 5th DCA 2013); Roberts v.

Albertson ' s Inc. , 119 So. 3d 457, 465 - 466 (Fla. 4th DCA 2012),

reh ' g and reh ' g en banc denied sub nom . Giorgione v. Albertson ' s

Inc. , 2013 Fla. App. LEXIS 10067 (Fla. 4th DCA June 26, 2013).

2 7 . Under section 409.910(17)(b), a Medicaid recipient has

the right to re but this presumptively valid statutory default

allocation in an administrative hearing . This is accomplished by

establishing, through clear and convincing evidence, 2/ that either

a lesser portion of the total recovery should be allocated as a

medical expe nse reimbursement than is calculated under the

statutory formula, or that Medicaid actually provided a lesser

amount of medical assistance than has been asserted by

Respondent.

2 8 . Here, the parties stipulated that Medicaid paid the

amount to which Resp ondent asserts en titlement to reimbursement.

29 . Thus, Petitioner seeks to establish that pursuant to

the Settlement and Addendum, a lesser portion of the total

recovery under the Settlement ÏÏ specifically, $15,000 ÏÏ s hould be

allocated for medical expens e reimbursement, rather than the

$35,952.47 calculated under the statutory formula in section

409.910(11)(f).

30 . The undersigned determines that Petitioner has not

established, by clear and convincing evidence, that the $15,000

allocated in the Addend um fairly , or accurately , or reasonably

reflects the medical expenses incurred in the treatment of

Petitioner ' s injuries that are the subject of the Settlement.

31 . The sole evidentiary bases in the record for

Petitioner ' s position consist of Petitioner ' s own self - serving

claim that she was 90% at fault for the injuries she sustained,

and the Addendum's allocat ion of $15,000 for medical expenses

pursuant to t he liability apportioned between Petitioner and

Releasees. T his evidence does not provide a credi ble or

substantial basis on which to determine what part of the

Settlement proceeds should be allocated for medical expenses.

32 . As noted above, Petitioner did not present any evidence

regarding the actual medical expenses that were incurred in the

tre atment of her injuries.

33 . Further, the evidence that was presented ÏÏ consisting of

Petitioner ' s own testimony regarding the serious nature of her

injuries, her hospitalization, the subsequent extended treatment

she received from an orthopedic physician and a neurologist, her

continuing health problems resulting from the accident, and the

medical bills that she continues to receive over a year after the

accident ÏÏ belie s her claim that the $15,000 allocation for

medical expenses in the Addendum fairly r ef lects the medical

expenses incurred in treating her injuries.

34 . Accepting P etitioner ' s argument that the Settlement and

Addendum, standing alone, dictate the amount of medical expenses

effectively would bind Respondent to the allocation made by

Petition er and Releasees in the Addendum, even though Respondent

was not a party to the Settlement and Addendum. The import of

that position is that the parties to a settlement agreement

could , in every case, circumvent the statutory reimbursement

formula in sect ion 409.910(11)(f) simply by agreeing between

t hemselves to a stated allocation for medical expenses in an

amount less than that determined using the statutory formula.

This approach is contrary to the Legislature ' s stated intent in

section 409.910 that M edicaid be repaid in full from third - party

resources. Here, Respondent was not a party to the Settlement,

so is not bound by it. See Mobley v. Ag. for Health Care Admin. ,

Case No. 13 - 4785 (Fla. DOAH May 21, 2014); Savasuk v. Ag. for

Health Care Admin. , C ase No. 13 - 4130 (Fla. DOAH Jan. 29, 2014).

35 . Of course, Respondent ' s lack of participation in a

settlement does not necessarily ensure in every case that the

statutory formula ' s default calculation of the medical expense

portion of the total recovery will prevail. Indeed, the very

purpose of section 409.910(17)(b) is to authorize an

administrative determination that a lesser portion of the

recovery should be allocated as reimbursement for medical

expenses. A settlement agreement does not dictate, but may

inform, that administrative determination. A settlement ' s

allocation to medical expenses may be adopted , even when

Respondent did no t participate in the settlement, provided that

the allocation is supported by clear and convincing evidence.

36 . He re , there is no persuasive ÏÏ let alone clear and

convincing ÏÏ evidence establishing a factual basis for

Petitioner's position that the $15,000 allocation agreed to by

Petitioner and Releasees represents a fair , accurate, or

reasonable allocation for Petition er's medical expenses .

37 . Accordingly, it is determined that Petitioner has

failed to carry her burden to establish, by clear and convincing

evidence, that a lesser portion of the total s ettlement recovery

in this matter should be allocated as reim bursement for medical

expenses than the amount calculated by the agency pursuant to the

formula set forth in section 409.910(11)(f).

ORDER

Upon consideration of the foregoing Findings of Fact and

Conclusions of Law, it is hereby

ORDERED that Respondent, Agency for Health Care

Administration, is entitled to reimbursement in the amount of

$35,952.47 , pursuant to section 409.910(11)(f) , in satisfaction

of its Medicaid lien.

DONE AND ORDERED this day 30th of October , 2014 , in

Tallahassee, Leon County, Flor ida.

S

CATHY M. SELLERS

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.u s

Filed with the Clerk of the

Division of Administrative Hearings

this 30th day of October , 2014 .

ENDNOTES

1/ All references are to 2013 Florida Statutes.

2 / The " clear and convincing " evidentiary standard has been

described as an " intermediate stan dard, " requiring more proof

than a preponderance of the evidence, but less than the " beyond

and to the exclusion of a reasonable doubt " standard. In re

Graziano , 696 So. 2d 744, 753 (Fla. 1997). For proof to be

considered clear and convincing ,

[t] he evidence must be found to be credible;

the facts to which the witnesses testify must

be distinctly remembered; the testimony must

be precise and explicit and the witnesses

must be lacking in confusion as to the facts

in issue. The evidence must be of such weight

that it produces in the mind of the trier of

fact a firm belief or conviction, without

hesitancy, as to the truth of the allegations

sought to be established.

In re Davey , 645 So. 2d 398, 404 (Fla. 1994) (quoting Slomowitz

v. Walker , 429 So. 2d 79 7, 800 (Fla. 4th DCA 1983)); see also In

re Adoption of Baby E.A.W. , 658 So. 2d 961, 967 (Fla. 1995) ( " The

evidence [in order to be clear and convincing] must be sufficient

to convince the tr ier of fact without hesitancy. " ). " Although

this standard of pro of may be met where the evidence is in

conflict . . . it seems to preclude evidence that is ambiguous. "

Westinghouse Electric Corp. v. Shuler Bros. , 590 So. 2d 986, 989

(Fla. 1st DCA 1991).

COPIES FURNISHED:

Christopher G. Klemick, Esquire

Law Office of Klemick and Gampel, P.A.

1953 Southwest 27th Avenue

Miami, Florida 33145

(eServed)

John Cofield

Affiliated Computer Services, Inc.

2308 Killearn Center Boulevard

Tallahassee, Florida 32309

(eServed)

Adam James Stallard, Esquire

Xerox Recovery Services Group

2073 Summit Lake Drive , Suite 300

Tallahassee, Florida 32317

(eServed)

Frank Dichio

Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 19

Tallahassee, Florida 32308

(eServed)

Stuart Fraser Williams, General Counsel

Agency for Hea lth Care Administration

2727 Mahan Drive , Mail Station 3

Tallahassee, Florida 32308

(eServed)

Richard J. Shoop, Agency Clerk

Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 3

Tallahassee, Florida 32308

(eServed)

Elizabeth Dudek, Secr etary

Agency for Health Care Administration

2727 Mahan Drive , Mail Stop 1

Tallahassee, Florida 32308

(eServed)

NOTICE OF RIGHT TO JUDICIAL REVIEW

A party who is adversely affected by this Final Order is entitled

to judicial review pursuant to section 120.68, Florida Statutes.

Review proceedings are governed by the Florida Rules of Appellate

Procedure. Such proceedings are commenced by filing the o riginal

notice of administrative appeal with the agency clerk of the

Division of Administrative Hearings within 30 days of rendition

of the order to be reviewed, and a copy of the notice,

accompanied by any filing fees prescribed by law, with the clerk

of the District Court of Appeal in the appellate district where

the agency maintains its headquarters or where a party resides or

as otherwise provided by law.